MAYNARD, Mass., July 28 /PRNewswire/ -- Digital Equipment Corporation (NYSE:DEC), the world's leading supplier of networked computer systems and services, today reported results for the fourth quarter and full fiscal year that ended July 3, 1993.
For the quarter, the corporation reported net earnings of $113,196,000 or 85 cents per share on revenues of $3,913,951,000. This compares with a net loss of $1,855,132,000 or $14.76 per share on revenues of $3,905,784,000 for the comparable quarter a year ago. The loss in the fourth quarter of fiscal 1992 included a restructuring charge of $1.5 billion, primarily to be used for employee separations, facility consolidations, asset retirements and related costs.
For the full fiscal year ended July 3, 1993, the corporation reported a net loss of $251,330,000 or $1.93 per share on revenues of $14,371,369,000. This compares with a net loss of $2,795,507,000 or $22.39 per share on revenues of $13,930,872,000 for the comparable period a year ago. The prior year's loss included a one time charge of $485,495,000 for the cumulative effect of an accounting change and a $1.5 billion restructuring charge.
"I am pleased to be able to report a continued, significant improvement in our overall operating results both for the quarter and the full year," said Robert B. Palmer, president and chief executive officer. "While I am not satisfied with any loss, my confidence in Digital's future is fueled by the improvements we have been able to achieve over the past three quarters. I am particularly pleased to be able to report that for the three quarters since the new management team has been in place, Digital has posted a cumulative net profit of $9 million. With our new customer-focused business unit structure now in place, we are poised to grow revenues and increase our market share, while continuing to work diligently to reduce our costs," he added.
"The year just ended was a year of significant change for Digital and we will continue the transformation of the corporation throughout fiscal year 1994. Our customers are counting on us to be successful and to help them succeed. We have leadership competitive products -- both hardware and software -- from the fastest workstations at any price to the most robust, open, client/server systems. We offer comprehensive worldwide service and support for thousands of products, not just from Digital, but from other vendors as well. As a result, the excitement of our employees and partners is generating growing enthusiasm in the marketplace," he added.
"Notwithstanding our concern about the seasonally soft September quarter, I am confident that Digital is poised for resurgence and the responsibility is with this management team to make that happen," he concluded.
William M. Steul, vice president and chief financial officer said, "We experienced slight revenue growth in the U.S. and solid growth throughout Asia, compared with the fourth quarter of last year. However, our European business in general was weak, as was true for many other technology companies," he added. "Most economists do not look for growth in Europe next year. As a result of the uncertain economic outlook, we remain very cautious about our ability to maintain profitability for the seasonally soft first quarter."
"We continue to be encouraged by the results from our focus on reducing costs. As we rationalized our engineering effort and product offerings, research and engineering spending declined by 24 percent or $116 million compared with the same quarter a year ago to be more in line with competitive norms. In addition, selling, general and administrative expenses declined by 17 percent or $215 million compared with the same quarter a year ago. Capital spending was $529 million for the full year, the lowest level since 1984," he added. "For the second quarter in a row, the Corporation generated a positive cash flow from operations and ended the year with a cash balance of more than $1.6 billion."
William D. Strecker, vice president of Engineering said, "During fiscal year 1993, Digital launched the Alpha AXP systems, and introduced the world's fastest PC, as well as the fastest workstations at every price point in the industry. Over 2,600 Alpha AXP software solutions are available to customers today. Our Alpha AXP strategy continues to support unified UNIX, Windows NT and OpenVMS operating systems."
"While Alpha AXP-based revenues were a small factor in this year's results, we look forward to increasing contributions, consistent with historical trends in the introduction of a new generation of technology. In increasing numbers, customers, software developers and systems vendors are selecting the Alpha AXP architecture for their future computing needs," he added.
"For example, Carrier Corporation, the world's largest manufacturer of air conditioning, heating and refrigeration equipment, standardized on Alpha AXP technology for its worldwide manufacturing and engineering operations."
Digital Equipment Corporation, headquartered in Maynard, Mass., is the leading worldwide supplier of networked computer systems, software and services. Digital pioneered and leads the industry in interactive, distributed and multivendor computing. Digital and its business partners deliver the power to use the best integrated solutions -- from desktop to data center -- in open information environments.
/NOTE TO EDITORS: Alpha AXP and OpenVMS are trademarks of Digital Equipment Corporation. UNIX is a registered trademark of UNIX System Laboratories, Inc. Windows NT is a trademark of Microsoft Corporation
FOURTH QUARTER ENDED:
July 3, 1993 June 27, 1992
PRODUCT SALES $2,085,567,000 $2,143,345,000
SERVICE & OTHER
REVENUES 1,828,384,000 1,762,439,000
TOTAL OPERATING
REVENUES 3,913,951,000 3,905,784,000
COST OF PRODUCT SALES 1,277,981,000 1,220,059,000
SERVICE EXPENSE & COST
OF OTHER REVENUES 1,060,298,000 1,085,419,000
TOTAL COST OF SALES 2,338,279,000 2,305,478,000
GROSS MARGIN 40.3 percent 41 percent
RESEARCH & ENGINEERING 369,376,000 485,241,000
SELLING, GENERAL &
ADMINISTRATIVE 1,088,067,000 1,303,134,000
RESTRUCTURING CHARGE --- 1,500,000,000
INTEREST INCOME 20,081,000 24,447,000
INTEREST EXPENSE 18,091,000 10,664,000
INCOME/(LOSS) BEFORE
INCOME TAXES 120,219,000 (1,674,286,000)
INCOME TAXES 7,023,000 180,846,000
NET INCOME/(LOSS) $113,196,000 $(1,855,132,000)
NET INCOME/(LOSS)
PER SHARE 85 cents $(14.76)
AVERAGE NUMBER OF SHARES
OUTSTANDING 133,476,529 125,691,368
OPERATING RESULTS FOR THE TWELVE MONTHS ENDED:
PRODUCT SALES $7,587,994,000 $7,696,029,000
SERVICE & OTHER
REVENUES 6,783,375,000 6,234,843,000
TOTAL OPERATING
REVENUES 14,371,369,000 13,930,872,000
COST OF PRODUCT SALES 4,464,445,000 4,248,118,000
SERVICE EXPENSE & COST
OF OTHER REVENUES 4,166,946,000 3,883,705,000
TOTAL COST OF SALES 8,631,391,000 8,131,823,000
RESEARCH & ENGINEERING 1,530,119,000 1,753,898,000
SELLING, GENERAL &
ADMINISTRATIVE 4,447,160,000 4,680,822,000
RESTRUCTURING CHARGE --- 1,500,000,000
INTEREST INCOME 63,831,000 96,176,000
INTEREST EXPENSE 50,837,000 38,517,000
LOSS BEFORE INCOME TAXES
& CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE (224,307,000) (2,078,012,000)
INCOME TAXES 27,023,000 232,000,000
LOSS BEFORE CUMULATIVE
EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE (251,330,000) (2,310,012,000)
CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING
PRINCIPLE, NET OF TAX --- 485,495,000
NET LOSS $(251,330,000) $(2,795,507,000)
AVERAGE NUMBER OF
SHARES OUTSTANDING 130,408,884 124,864,122
LOSS PER SHARE AFTER
TAXES BEFORE
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE $(1.93) $(18.50)
LOSS PER SHARE ON
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE --- (3.89)
NET LOSS PER SHARE $(1.93) $(22.39)
BALANCE SHEET/CASH FLOWS - Q4 FY93
CASH & CASH EQUIVALENTS....................... $1,643,195,000
ACCOUNTS RECEIVABLE, NET...................... 3,020,252,000
A/R DAYS SALES OUTSTANDING.................... 69 DAYS
INVENTORIES: RAW MATERIALS................... 331,506,000
WORK IN PROCESS................. 502,200,000
FINISHED GOODS.................. 921,434,000
TOTAL INVENTORIES............... 1,755,140,000
PREPAID EXPENSES.............................. 379,122,000
DEFERRED INCOME TAX CHARGES, NET.............. 84,806,000
TOTAL CURRENT ASSETS.......................... 6,882,515,000
PROPERTY, PLANT & EQUIPMENT, NET.............. 3,178,291,000
TOTAL ASSETS.................................. 10,950,343,000
BANK LOANS & CURRENT PORTION OF
LONG-TERM DEBT............................... 21,335,000
TOTAL CURRENT LIABILITIES..................... 3,918,714,000
LONG TERM DEBT................................ 1,017,577,000
POSTRETIREMENT BENEFITS....................... 1,128,653,000
TOTAL LIABILITITES............................ 6,064,944,000
STOCKHOLDERS' EQUITY.......................... 4,885,399,000
BOOK VALUE PER SHARE.......................... $36.19
INVESTMENTS IN PP&E - QTR..................... 170,272,000
DEPRECIATION & AMORTIZATION - QTR............. 208,950,000
INVESTMENTS IN PP&E - YEAR.................... 528,691,000
DEPRECIATION & AMORTIZATION - YEAR............ 838,183,000
NON U.S. REVENUES - QUARTER................... 2,449,366,000
OR 63 percent
NON U.S. REVENUES - YEAR...................... 9,164,148,000
OR 64 percent
TOTAL EMPLOYEE POPULATION..................... 94,200
-0- 7/28/93
/CONTACT: Bradley D. Allen, director of Investor Relations, 508-493-7182, or James Chiafery, Investor Relations specialist, 508-493-8009, both of Digital Equipment Corporation/
(DEC)

CO: Digital Equipment Corporation ST: Massachusetts IN: CPR SU:
ERN

DJ -- NE004 -- 6596 07/28/93 08:23 EDT

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